Which ornaments or coins that can be pledged for gold loan
Only gold jewelery between 18 and 22 karats and bank-minted coins (up to 50 gms per client) can be presented for gold loan. According to the Kotak Mahindra Bank website, “Non funded items / articles such as Hair pins, Cufflinks, Gold watch, Gold strap, Gold idols, Gold utensils, jewellery with more than 50% deduction, Thread mangalsutra, White gold, Diamond jewellery, Imitation jewellery, Ginni, Gold bars cannot be accepted.”
Gold loan limit
Gold loan limit vary with bank and customer. The purity and weight of the gold that is pledged define the Gold Loan’s value. As per the Kotak Mahindra Bank, “ The limit of your loans is directly proportional to the value of gold assets you provide. However, Minimum Loan amount: Rs. 20,000/- & Maximum Loan Amount: Rs. 1,50,00,000/- can be availed by a single customer/Family/Group at any point of time at the discretion of the Bank. The LTV – loan to value – ranges from 65% to 75%.”
Gold loan foreclosure
While it depends on bank that loan is availed, some may allow and some may allow with penalty, As per Kotak Mahindra Bank, “You can choose to foreclose the loan anytime which may be subject to foreclosure charges as applicable, if closed before the agreed minimum period (ranging from 45 days to 6 months) and at the discretion of the Bank.”Foreclosure charges
ICICI Bank charges 1%, If a/c is closed within 11 months on Twelve months product. HDFC Bank charges 1% + applicable tax. According to the Bank of Baroda website, there is no pre-payment and pre closure charges of gold loan.
How long does it take to process Gold Loan?
While, it depends on the bank, for Kotak Mahindra Bank customers, gold loan will be sanctioned in 90 to 120 minutes approximately in general. Please note if loan amount is Rs.25 lakhs or above, ITR is required to be submitted by customer and PAN is must if annual income exceeds Rs.5 lakhs.
Gold loan repayment period
According to the SBI website, below are the repayment period for gold loan customers.
- Gold Loan (EMI based) : 36 months
- Liquid Gold Loan ( Overdraft) : 36 months
- 3 Months Bullet Repayment Gold Loan: 3 months
- 6 Months Bullet Repayment Gold Loan : 6 months
- 12 Months Bullet Repayment Gold Loan: 12 months
Processing fee for SBI gold loan is NIL till March 31, 2023. HDFC Bank and ICICI Bank charges a loan processing charge of 1% of disbursal amount. Bank of Baroda processing charge is NIL, up to Rs 3.00 lakhs